Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hubrey Home Inc. is considering a new three - year expansion project that requires an initial fixed asset investment of $ 4 . 3 million.

Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $4.3 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year), and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $2,690,000 in annual sales, with costs of $852,000. If the tax rate is 35%, what is the OCF for each year of this project? (Enter the answers in dollars. Do not round your intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.)
\table[[OCF ?1,$,1440050],[OCF ?2,$,1578475],[OCF ?3,$1463342,]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management And Policy

Authors: James C. Van Horne

12th Edition

0130326577, 9780130326577

More Books

Students also viewed these Finance questions

Question

How can you create a supportive context for your personal growth?

Answered: 1 week ago

Question

How do romantic relationships typically escalate and deteriorate?

Answered: 1 week ago